Wyndham O'Hare to close Jan. 1

December 22, 2009

The Wyndham O'Hare at Rosemont notified the hotel union Monday that it will close Jan. 1, leaving approximately 107 employees out of work in the New Year, according to Bill Biggerstaff, president of Unite Here Local 450.

Wyndham did not immediately provide a statement about the closure today.

Biggerstaff said union attorneys are fighting to delay the date of the closure, because it did not allow employees ample notice required by law, which offers protection to workers by requiring employers to provide notice 60 days in advance of covered plant closings and covered mass layoffs.

The union also plans to negotiate severance benefits for the laid-off workers, he said. The 12-floor, 466-room hotel hosts two restaurants and was served mostly by overnight patrons of Chicago O'Hare International Airport.

The news comes at a time of declining revenue in the hotel industry and a struggling convention industry in Chicago. Among large hotel chains, Starwood Hotels & Resorts reported the largest decline in revenue per available room last quarter, according to William Marks, a JMP Securities analyst covering the hotel industry

Marks said that despite revenue declines, closures have been rare as hotels have mostly managed to remain profitable.

"Despite the downturn, most hotels are running cash flow positive." Marks said. "For a hotel to shut down even in this environment is generally taking a bad balance sheet to drive the closure."

Chicago's hotel business is heavily tied to convention business, Marks said, which, along with those hotels carrying large amounts of debt, could also account for hotels closings along.

Monday the Sheraton Chicago Northwest and CoCo Key Water Resort announced it would close Dec. 28. The Sheraton branded hotel was owned by WPH Arlington LLC, which said in a statement that the decision followed "many months of operational adjustments, significant negotiations and work with union leadership, negotiations relative to adjustments in real estate taxes and ongoing funding to maintain operations in hopes of some market recovery."

"Given the state of the economy in the Chicagoland market and the continued fall off of local business travel and corporate markets, it is not economically viable to continue with hotel operations," the company said.

The owners of the Intercontinental Hotel at O'Hare filed for bankruptcy protection in August amid approximately $155 million in debt. The court has given the owners until March 2010 to come up with a restricting plan and, in the meantime, the hotel has been allowed to conduct business as usual, according to court filings.